Martin Lewis: Saver builds up £4,000 & buys first home through bank switching – could you?
Extreme Savers: Guest says switching banks helped him buy house
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Martin Lewis regularly pushes savers to regularly switch their bank accounts in order to get the best deals and today, it was shown just how worthwhile this could be when taken to the extreme. In tonight’s episode of Martin Lewis’ Extreme Savers, David’s story was shared on how he managed to generate huge sums by pressuring banks.
Martin began by reminding savers that banks are desperate to get new customers and as such, they will regularly launch deals to entice new money.
David, a 31-year-old from Coventry, took heed of this can capitalised on as many switching deals as he could find.
David explained: “In the last five to six years I managed to switch banks 15 or 16 times, which has helped me to ultimately buy my first house.
“Bank switching works by telling the bank that you want to switch to [a different] account and in the space of seven days, they’ll transfer across all the money that you have in your account.
“They will transfer your direct debits across for you and any standing orders you currently have. So, the idea of it is to try and make as seamless a switch as possible.
“At any specific point in time, there’ll be lots of different banks offering different incentives, whether it’s an upfront switching bonus or ongoing monthly rewards.
“For one of the banks, I actually made £250 as a cash incentive and that was £150 upfront, but because they were so confident in their services, they offered anyone who wants to leave after six months £100 pounds for leaving.
“So, six months came around, and I said I’m gonna leave and true to their word, they gave me £100.”
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Martin chimed in from this point to remind savers many banks offer ongoing monthly perks which require the holders to deposit minimum amounts each month.
The money saving expert explained this is their way of trying to get savers to pay their salary into the account.
However, the deposits do not have to come from a salary, they can come from anywhere.
So, for those who have multiple accounts like David, it will be possible to switch money across the accounts and hit the minimum requirements on all of them, locking in the bonuses.
David concluded by breaking down how he kept on top of this: “When I started I did have a spreadsheet that listed all of the standing orders I had set up, quite a bit of effort involved upfront.
“I would estimate I’ve made around £1,600 pounds so far and that doesn’t include some of the referrals I’ve made from referring some of my friends and family to do exactly the same thing.
“It doesn’t even include the ongoing interest, so if I just left things as they were kept with my old faithful account, I’ve made £4,000 more.
“I was able to put down the deposit on my first house, and there’s no way I would have been able to do that without the bank switching.”
Martin was thrilled at this result but he went on to issue a warning.
He explained multiple switches can have a “negative impact on your credit worthiness.”
Martin concluded: “Now that isn’t a problem, if you’ve got no credit applications to make.
“But if you’re shortly to do an important application, for example for a mortgage, I’d steer clear for the time being.”
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